Masan has closed 421 VinMart+ convenience stores and 12 VinMart supermarkets this year as it restructures the retail business it acquired this year from Vingroup.
Most of the closed stores were in Ho Chi Minh City. The closure has resulted in a cut in losses for its VinCommerce subsidiary, with the earnings before interest, taxes, depreciation and amortization (EBITDA) margin increasing from negative 6.7 percent in the first nine months of last year to negative 2.8 percent in the same period this year, Masan said in a release.
Most of the 433 outlets had revenues 50 percent lower than optimal levels required to achieve breakeven, and posted a combined loss of VND239 billion ($10.3 million) this year before their closure.
VinCommerce hopes to reach breakeven EBITDA in the last quarter and achieve 10 percent revenue growth over the third quarter. Its gross profit is set to be improved by optimizing product assortment and renegotiating terms with suppliers, the release said.
“Improved profitability from closing underperforming locations is expected to be fully realized in 2021.”
The company also opened 57 new VinMart+ outlets and one new VinMart supermarket in the first nine months, launched three new concept VinMart+ store formats in Ho Chi Minh City and Hanoi with more fresh products and an improved layout to understand consumer behavior and design model stores for the next round of expansion.
As of the end of September VinCommerce had 2,646 outlets, 122 of them supermarkets.
Masan acquired VinCommerce from Vietnam’s biggest private company, Vingroup, in January this year and owns a 83.74 percent stake in it.
Reported by Dat Nguyen, @Vnexpress